Man admits Ponzi scheme

Thompson could get up to eight yearsin federal prison.

Updated 7:51 pm, Thursday, July 21, 2011

A one-time San Antonio businessman faces up to eight years in federal prison after pleading guilty Thursday for his role in a multimillion-dollar Ponzi scheme headed by a former college basketball referee.

Gregory W. Thompson, 58, pleaded guilty in San Antonio federal court to securities fraud and money laundering. He is free on a personal recognizance bond until his Oct. 26 sentencing. He likely will have to make restitution.

Thompson was part of a six-person network that raised more than $100 million from hundreds of investors around the country in return for promises of lofty returns on investments made with major foreign banks, federal prosecutors allege.

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None of the money was invested, however. Thompson used investor funds to pay personal and business expenses, including paying off the mortgage on the office building once occupied by TNT Office Supply, his now-defunct company.

Thompson was described by prosecutors as a “sub-promoter” for Travis E. Correll, who was a Southeastern Conference basketball official before he resigned in 2005 after being named in the investment scheme. Correll is serving a nine-year prison sentence. He also must pay $29 million in restitution.

Thompson met Correll through a family member, according to Assistant U.S. Attorney Thomas McHugh.

Thompson declined to comment after his arraignment. His attorney, Michael Gibson, said Thompson was remorseful.

“It's a resolution of a very difficult case,” Gibson said. There's been “a lot of fallout for a lot of good people, including my client.”

Thompson originally was charged in an 18-count indictment, which was reduced to seven counts earlier this year. The IRS' Criminal Investigation division investigated the case.

Thompson told investors they could earn monthly returns of 5 percent to 8 percent, which amounts to a return of 60 percent to 96 percent on an annual basis.

McHugh said investors each invested hundreds of thousands of dollars because they believed in Thompson's “goodness.”

“I've talked to so many investors and they just kick themselves, cry and ask themselves, ‘How could I be so stupid?'” McHugh said.

McHugh added that investors were almost doomed by their “eternal optimism.” “Too good to be true is only true in the land of lollipops and dancing fairies,” McHugh said.

Thompson used some of the proceeds raised from later investors to pay earlier investors, which is a Ponzi scheme.

Wayside Chapel Senior Pastor Roger Poupart said he didn't know Thompson or that some of his church members were victims of an investment scheme. “I've not heard from anybody in our church that they've been victimized. I'm certainly sad to hear that,” Poupart said. “I pray that he finds God's healing and forgiveness.”

Thompson previously settled civil charges by the Securities and Exchange Commission, though he neither admitted nor denied the agency's allegations. A receiver on the case told the San Antonio Express-News in 2009 that about $1.1 million had been recovered from Thompson.